Caterpillar investment in China, plans to build small and medium diesel engines

The company has signed a non-binding memorandum of understanding with the Wuxi National High-Tech Industrial Development Zone outlining a significant, multi-year investment to develop and manufacture Perkins and Caterpillar-branded engines in Wuxi, Jiangsu province, China.

Staff

08/30/2007

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Caterpillar, Inc. , announced recently its intention to build small and medium diesel engines in Wuxi , Jiangsu province, China. The company has signed a non-binding memorandum of understanding with the Wuxi National High-Tech Industrial Development Zone outlining a significant, multi-year investment to develop and manufacture Perkins and Caterpillar-branded engines in Wuxi. The first of the planned engine operations will focus on production of the Perkins 400 Series three and four-cylinder diesel engines.“Opening this engine facility in China will further leverage the global reach of the 400 Series engines, which have become very popular with original equipment manufacturers around the world,” said Hans Haefeli, vice president with responsibility for the Industrial Power Systems Division for Caterpillar. “This new facility will make the 400 Series engines more readily available for original equipment manufacturers with operations in China and the Asia-Pacific region.”Perkins Shibaura Engines, a joint venture between Perkins Engines Company Limited , and partner IHI Shibaura Machinery Corporation , will manufacture the 400 Series Perkins engines in Wuxi. The engines will be sold primarily to OEMs in Asia who produce small construction, agriculture, turf and material handling machines, as well as generator sets.Caterpillar also plans to manufacture medium-sized diesel engines in Wuxi and to focus engine research and development there for engines that meet the emissions requirements for Chinese and other customers. The medium-sized engines will be used in Caterpillar core construction equipment for power generation in commercial marine applications and would be sold to OEMs for agriculture and other industrial uses.Once the engine facilities in Wuxi are fully operational, they will have the combined capacity to produce in excess of 100,000 diesel engines per year. Construction of the engine facilities is subject to a final agreement being reached between Caterpillar and the Wuxi government, as well as to other applicable approvals.

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